Economy

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The Chancellor has used the Budget to limit the Scottish Government's room for manoeuvre, say David Bell, particularly through changes to Corporation Tax and the National Minimum Wage.
 
Once again, George Osborne has proved himself to be a clever politician.
 
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The Scottish Government's new capacity to borrow is a vital, if little-discussed, power. However, says Angus Armstrong, the details of how this will work may have been dodged by the Smith Commission but cannot long be avoided by the Scottish Government and HM Treasury. 
 
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What’s the fuss about austerity?
 
Is all the concern about austerity misplaced? The latest labour-market statistics published on Wednesday contained more good news. There was another increase in the employment rate, in both Scotland and the UK. Scotland’s 74.4% employment rate is at an all time high. The economic inactivity rate has fallen and is at a historic low.
 
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Income inequality in Scotland (and the UK) was low and stable throughout the 1960s and 1970s. The 1980s saw a significant increase in inequality, driven by a variety of factors. Deindustrialisation and technological change caused a fall in demand for many middle and lower-skilled occupations, and this combined with an erosion of trade union power and labour market deregulation led to a relative decline in wages at the lower end of the distribution. Financial deregulation and a reduction in top rates of income tax contributed to a rise in salaries at the upper end.
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Current discussions over the Scotland Bill have seen the Chancellor and SNP Westminster leader Angus Robertson at loggerheads over the role of borrowing in national life. Gemma Tetlow of the Institute for Fiscal Studies discusses the approach of the two governments and their likely implications for taxation. 

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Talk of Scotland adopting a Scandinavian economic model usually comes with no mention of the bill but, suggests recent research, the impact of higher taxes is more complicated than it might at first appear. 
 
The Scottish Government holds up the Scandinavian economic model as one this country might emulate.
 
The focus is typically on the good news of more and better public services, with little comment on higher levels of taxation to pay for them.
 
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The suggestion by the SNP that success at the Westminster election provides a mandate for devolution of the National Minimum Wage may create some unexpected complications, says David Eiser.
 
The SNP believes that the scale of its victory at the General Election amounts to a mandate for the devolution of further powers (beyond those recommended by the Smith process) to the Scottish Parliament. In particular, they have called for devolution of powers over the minimum wage, both in their election manifesto and in subsequent announcements.
 
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  • 21st June 2018

    New research conducted by the universities of Edinburgh and Glasgow suggests that a post-Brexit Scotland is likely to find itself losing out on much-needed low-skilled migrant labour from the European Economic Area (EEA) to English-speaking countries such as North America, Australia, and to countries within the EEA.

  • 19th June 2018

    Following the collapse of the Rajoy government following a corruption scandal, how does the new political landscape affect the constitutional debate in Catalonia? Prof Antonia María Ruiz Jiménez of Universidad Pablo de Olavide suggests that this apparently dramatic change will make relatively little difference.

  • 13th June 2018

    While populist leaders and movements make headlines worldwide, an often more subtle majority nationalism remains an endemic condition of the modern world. This phenomenon is comparatively understudied. The Centre on Constitutional Change invites calls for abstracts for an international workshop on the topic of majority nationalism, to be held in February 2019.

  • 31st May 2018

    The recent report by the Growth Commission contains some interesting ideas, says Michael Keating, but also makes some problematic assumptions.

  • 30th May 2018

    The Scottish and Welsh Governments worked together closely during their negotiations with the UK Government over those aspects of the EU (Withdrawal) Bill that related to devolution. Despite ultimately choosing different paths, say Hedydd Phylip and Greg Davies, this spirit of cooperation looks set to continue.

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